The company’s second quarter 2011 earnings
conference call will be held at 8 a.m. EDT today. Participants may dial
800-938-1120 in the U.S. or Canada (706-634-7849 internationally) and
provide the following ID: 78540006 or may listen via the Internet at www.sprint.com/investor.

OVERLAND PARK, Kan. (BUSINESS WIRE), July 28, 2011 -
Sprint Nextel Corp. (NYSE: S) today reported that during the
second quarter of 2011, the company added nearly 1.1 million total net
wireless subscribers primarily driven by net prepaid subscriber
additions of 674,000, net wholesale and affiliate subscriber additions
of 519,000 and net postpaid subscriber additions of 275,000 for the
Sprint brand. The company achieved its best ever postpaid churn of 1.75
percent and the lowest prepaid churn in almost six years at 4.14 percent.

Sprint reported second quarter consolidated net operating revenues of
$8.3 billion, operating income of $79 million and Adjusted OIBDA* of
$1.3 billion. Additionally, the company reported a net loss of $847
million and a diluted loss per share of 28 cents for the quarter, which
includes $588 million in equity losses of unconsolidated investments and
other ($.20 per share net of tax, which includes the effect of increased
valuation allowance of $209 million) and a $52 million charge ($.02 per
share, which includes approximately $19 million of related increase in
valuation allowance) to tax expense related to recently enacted state
law changes in the state of Michigan. Sprint generated $267 million of
Free Cash Flow* in the quarter. As of June 30, 2011, the company’s total
liquidity was $5.2 billion, which consists of $4.3 billion in cash, cash
equivalents and short-term investments and $900 million of borrowing
capacity available under its revolving bank credit facility. The
company’s next scheduled debt maturities of $2.3 billion are due in
March 2012.

During the second quarter, independent organizations continued to
reinforce Sprint’s leadership with numerous recognitions and awards.
Sprint was unbeaten among major wireless carriers for customer
satisfaction according to results from the 2011
American Customer Satisfaction Index. In addition to tying for first
place among major wireless carriers, Sprint was also the most improved
company in customer satisfaction, across all industries, over the last
three years according to the survey. Frost & Sullivan gave Sprint its
2011 North American Wireless Consumers’ Choice for Customer Value
Enhancement Award. Sprint was recognized as Best-in-Class among North
American Business Connectivity and Wireless Providers by research firm
ATLANTIC-ACM in 11 different categories including Wireless Sales Reps,
Provisioning, Billing and Customer Service. For the second consecutive
year, Sprint received the Sustainability Leadership Award at the
International Electronics Recycling Conference and Expo.

Sprint further strengthened its award-winning device portfolio by
launching or announcing several innovative products and services during
the quarter. Sprint launched three more 4G devices, HTC EVO View 4G™,
HTC EVO™ 3D and Nexus S™ 4G from Google™. In addition, Sprint announced
the coming availability of the first international 4G smartphone,
Motorola PHOTON™ 4G later this month. Since launching 4G in 2008, Sprint
has introduced or announced 24 4G-capable devices, more than any other
U.S. carrier. Sprint’s current 4G device portfolio includes five
smartphones, a tablet and numerous USB modems, hotspots and routers.

Sprint also launched several other cutting-edge devices, including
Motorola XPRT™, Sprint’s first Android smartphone to deliver
enterprise-class security, personal productivity enhancements and
international roaming. Also launched were the award-winning Kyocera
Echo™, the nation’s first dual-touchscreen Android™ smartphone, and
Samsung Galaxy Prevail™, the first CDMA Android device on Boost Mobile.
Sprint also launched its fourth green device and first eco-friendly
Android smartphone, the award-winning Samsung Replenish. Upcoming
launches include Motorola TRIUMPH™, thefirst Motorola
Android smartphone for Virgin Mobile, and Motorola Titanium™, the first
Nextel Direct Connect® smartphone built on Android 2.1.

Demonstrating Sprint’s open and innovative approach, in April the
company launched Google Voice integrated with Sprint for CDMA phones.
Sprint also announced that it will partner with Google to launch Google
Wallet, an application using near field communication technology to
enable smartphones (beginning with Nexus S) to make purchases at select
merchants. Additionally, last week Sprint announced an agreement that
will give Sprint customers easy access to ServeSM, American
Express' recently launched digital payments platform. Sprint also
launched 12 more Sprint ID packs, a service that downloads apps,
widgets, wallpapers, ringtones and other content related to a person’s
interest at the push of a button. New Sprint ID packs include the NASCAR
Sprint Cup Series ID pack, E! ID Pack anda Green ID pack.

Also in the quarter, Sprint launched several business market initiatives
including the Sprint Command Center, a centralized, secure, self-service
laboratory for businesses to develop next-generation machine-to-machine
(M2M) solutions and the 4G Enterprise WAN – a fixed wireless access
solution that provides speed, reliability and secure wireless
connectivity to the Sprint Global MPLS network. In addition, last week
Sprint unveiled Business Freedom, a ground-breaking set of plans
providing businesses the benefits of affordable data and voice plans
without the long-term contracts.

Finally, the spectrum hosting agreement announced today with
LightSquared demonstrates the growth opportunities made possible through
Network Vision. Through spectrum hosting, Sprint can offer carriers and
wireless providers the opportunity to more cost-effectively serve their
customers by operating on Sprint’s nationwide network infrastructure
versus building their own network facilities. Network Vision is an
innovative approach to network management and utilization that enables
products and services that operate across multiple spectrum bands, or
airwaves, to operate through a single multi-modal base station and
allows Sprint to more efficiently deliver innovative network
capabilities today and into the future. Through Network Vision, Sprint
can take advantage of new technology, chipsets and CDMA, CDMA-WiMax and
CDMA-LTE devices that operate in any of the 800 MHz and 1.9 GHz bands
operated by Sprint, along with the 2.5 GHz band operated by Clearwire
that offers WiMax 4G service and LightSquared’s 1.6 GHz spectrum that
will offer 4G LTE service. Through the implementation of Network Vision,
Sprint expects to improve its cost structure through lower roaming
expenses, backhaul savings and economies of scale and provide added
flexibility in how Sprint meets data and voice capacity demands in the
future.

Consolidated net operating revenues of $8.3 billion for the
quarter were 4 percent higher than in the second quarter of 2010 and
remained relatively flat as compared to the first quarter of 2011. The
quarterly year-over-year improvement was primarily due to higher
postpaid ARPU, growth in the number of net prepaid subscribers and
higher wireless equipment revenues, partially offset by net losses of
postpaid subscribers and lower wireline revenues.

Adjusted OIBDA* was $1.3 billion for the quarter, including the
estimated incremental impact of $120 million from customer acquisition
and retention expenditures to remain competitive in the marketplace
and $73 million related to disputes and settlements, including
Clearwire, and ongoing Network Vision expenses. This compared to
Adjusted OIBDA* of $1.5 billion for the second quarter of 2010 and the
first quarter of 2011. The quarterly year-over-year decline in
Adjusted OIBDA* was primarily due to an increase in wireless cost of
service, equipment net subsidy, and wireless SG&A expenses, as well as
lower wireline revenues, partially offset by higher postpaid and
prepaid service revenues and wireline cost reductions. Sequentially,
quarterly Adjusted OIBDA* declined primarily as a result of higher
wireless cost of service partially offset by higher prepaid and
postpaid service revenues.

Capital expenditures(1), excluding
capitalized interest of $102 million, were $640 million in the
quarter, compared to $437 million in the second quarter of 2010 and
$555 million in the first quarter of 2011. Wireless capital
expenditures were $546 million in the second quarter of 2011, compared
to $319 million in the second quarter of 2010 and $449 million in the
first quarter of 2011. During the quarter, the company invested
primarily in data capacity as a result of increased data usage to
maintain a competitive position in data service and overall network
quality. Wireline capital expenditures were $35 million in the second
quarter of 2011, compared to $49 million in the second quarter of 2010
and $53 million in the first quarter of 2011.

Free Cash Flow* was $267 million for the quarter, compared to
$709 million for the second quarter of 2010 and $178 million for the
first quarter of 2011. The quarterly year-over-year decline was due to
a decline in OIBDA*, increased capital expenditures and other changes
in working capital. Sequentially, quarterly Free Cash Flow* increased
primarily as a result of lower cash interest payments and pension
contributions, changes to certain vendor payment schedules and a $90
million prepayment for spectrum hosting offset by a decline in OIBDA*,
higher capital spending, and increased device and accessory inventory.

WIRELESS RESULTS

TABLE NO. 2 Selected Unaudited Financial Data (dollars in
millions)

Quarter To Date

Year To Date

Financial Data

June 30,2011

June 30,2010

%?

June 30,2011

June 30,2010

%?

Net operating revenues

$

7,452

$

7,014

6

%

$

14,865

$

14,062

6

%

Adjusted OIBDA*

$

1,102

$

1,224

(10

) %

$

2,385

$

2,420

(1

) %

Adjusted OIBDA margin*

16.3

%

19.0

%

17.7

%

18.7

%

Capital Expenditures (1)

$

546

$

319

71

%

$

995

$

630

58

%

Wireless Customers

The company served over 52 million customers at the end of the second
quarter of 2011. This includes 32.9 million postpaid subscribers (27.7
million via the Sprint brand on CDMA, 5 million on iDEN, and 268,000
Nextel PowerSource users who utilize both networks), 13.8 million
prepaid subscribers (11.1 million onCDMA and 2.7 million on
iDEN) and approximately 5.4 million wholesale and affiliate
subscribers, all of whom utilize our CDMA network.

For the quarter, Sprint added nearly 1.1 million net wireless
customers, including net additions of 573,000 retail subscribers and
net additions of 519,000 wholesale and affiliate subscribers as a
result of growth in prepaid MVNOs and M2M solutions.

Sprint lost approximately 101,000 net postpaid subscribers during the
quarter, a net improvement of 127,000, or 56 percent, compared to the
second quarter of 2010.

The company added 674,000 net prepaid subscribers during the quarter,
which includes net additions of 1.1 million prepaid CDMA customers,
offset by losses of 475,000 net prepaid iDEN customers.

The credit quality of Sprint’s end-of-period postpaid customers was
approximately 83 percent prime.

Wireless Churn

For the quarter, Sprint reported its best ever postpaid churn of 1.75
percent, compared to 1.85 percent for the year-ago period and 1.81
percent for the first quarter of 2011. Quarterly postpaid churn
improved year-over-year and sequentially primarily as a result of a
larger base of customers on fixed rate bundled plans or 4G handsets.

Approximately 9 percent of postpaid customers upgraded their handsets
during the second quarter, reflecting strong demand for Sprint’s
handset portfolio and continued strength in contract renewals.

Prepaid churn for the second quarter of 2011 was 4.14 percent,
compared to 5.61 percent for the year-ago period and 4.36 percent for
the first quarter of 2011. The quarterly year-over-year and sequential
improvements in prepaid churn were primarily a result of the
predominance of Boost Monthly Unlimited subscribers on CDMA and
Assurance WirelessSM customers, who on average have lower
churn than that of the remainder of our prepaid subscriber base.
Prepaid churn also benefited from improvement in churn for Virgin
Mobile customers both year-over-year and sequentially.

Wireless Service Revenues

Wireless retail service revenues of $6.7 billion for the quarter
represent an increase of almost 5 percent compared to the second
quarter of 2010 and almost 1 percent compared to the first quarter of
2011. The quarterly year-over-year improvement is primarily due to an
increased number of net prepaid subscribers as a result of the Boost
Monthly Unlimited offering, additional market launches of Assurance
WirelessSM and the re-launch of the Virgin Mobile brand, as
well as higher postpaid ARPU, partially offset by net losses of
postpaid subscribers since the second quarter of 2010. Sequentially,
wireless service revenues increased primarily as a result of growth in
net prepaid subscribers and higher postpaid ARPU.

Wireless postpaid ARPU increased year-over-year from $55 to $57, the
largest year-over-year postpaid ARPU growth in over seven years.
Year-over-year, ARPU benefited from higher monthly recurring revenues
as a result of premium data add-on charges for smartphones and the
greater popularity of fixed-rate bundle plans, partially offset by
lower overage, casual data and text revenues. Sequentially, ARPU
increased from $56 to $57, primarily as a result of growth in premium
data add-on revenues.

Prepaid ARPU of $28 for the quarter declined slightly year-over-year
and sequentially as a result of a greater mix of Assurance WirelessSM
customers who on average have lower ARPU than the remainder of our
prepaid subscriber base.

Quarterly wholesale, affiliate and other revenues were up $3 million,
compared to the year-ago period, and decreased $15 million
sequentially, resulting from changes in wholesale revenues from our 3G
MVNO relationships.

Wireless Operating Expenses and Adjusted OIBDA*

Total wireless operating expenses were $7.5 billion in the second
quarter, compared to $7.3 billion in the year-ago period and in the
first quarter of 2011.

Wireless equipment net subsidy in the second quarter was approximately
$1.1 billion (equipment revenue of $690 million, less cost of products
of $1.8 billion), compared to approximately $1 billion in the year-ago
period and approximately $1.1 billion in the first quarter of 2011.
The quarterly year-over-year increase in net subsidy is associated
with both postpaid and prepaid handset sales. Within postpaid, the
increase in net subsidy includes an increased mix of 4G smartphone
sales, which on average carry a higher subsidy rate per handset,
impact from a limited time offer which replaced mail-in rebates with
instant rebates in select sales channels and increased handset sales
volume. Within prepaid, the increase is primarily due to higher
handset sales volume as a result of the Boost Monthly Unlimited
offering, additional market launches of Assurance WirelessSM
and the re-launch of the Virgin Mobile brand. Sequentially, total net
subsidy remained relatively flat as lower overall prepaid subsidy was
offset by higher average subsidy rate per postpaid handset as a result
of instant rebates and a greater mix of 4G smartphones.

Wireless cost of service increased approximately 8 percent and 9
percent for the quarterly year-over-year and sequential periods,
respectively. The quarterly year-over-year and sequential increases
primarily resulted from higher customer data usage and higher service
and repair costs as a larger percentage of our customer base is on
smartphones.

Wireless depreciation and amortization expense decreased $369 million
year-over-year primarily due to the absence of amortization for
customer relationship intangible assets related to the 2005
acquisition of Nextel, which became fully amortized as of June 30,
2010, as well as the company’s annual depreciable life study
reflecting a reduction in the replacement rate of capital additions.

Wireless Adjusted OIBDA* of $1.1 billion in the second quarter of 2011
compares to $1.2 billion in the second quarter of 2010 and $1.3
billion in the first quarter of 2011. The quarterly year-over-year
decline in Adjusted OIBDA* was primarily due to an increase in cost of
service, equipment net subsidy, and SG&A expenses, partially offset by
higher postpaid and prepaid service revenues. Quarterly sequential
Adjusted OIBDA* declined primarily as a result of higher cost of
service partially offset by higher prepaid and postpaid service
revenues.

WIRELINE RESULTS

TABLE NO. 3 Selected Unaudited Financial Data (dollars in
millions)

Quarter To Date

Year To Date

Financial Data

June 30,2011

June 30,2010

%?

June 30,2011

June 30,2010

%?

Net operating revenues

$

1,090

$

1,272

(14

) %

$

2,210

$

2,569

(14

) %

Adjusted OIBDA*

$

210

$

273

(23

) %

$

438

$

552

(21

) %

Adjusted OIBDA margin*

19.3

%

21.5

%

19.8

%

21.5

%

Capital Expenditures (1)

$

35

$

49

(29

) %

$

88

$

105

(16

) %

Wireline revenues of $1.1 billion for the quarter declined 14 percent
year-over-year primarily as a result of an annual intercompany rate
reduction based on market prices for voice and IP, the scheduled
migration of wholesale cable VoIP customers off of Sprint’s IP
platform, and lower voice volume. Sequentially, second quarter
wireline revenues declined almost 3 percent primarily as a result of
continued migration of wholesale cable VoIP customers off of Sprint’s
IP platform.

Total wireline operating expenses were almost $1.0 billion in the
second quarter of 2011. Total operating expenses declined 6 percent
year-over-year due to lower cost of service from continued declines in
voice and cable IP volumes, improvement in SG&A expenses and lower
depreciation expenses. Sequentially, second quarter total operating
expenses decreased almost 2 percent primarily as a result of lower
cost of service from continued decline of voice and cable IP volumes.

Wireline Adjusted OIBDA* was $210 million for the quarter, compared to
$273 million in the second quarter of 2010 and $228 million reported
for the first quarter of 2011. Quarterly wireline Adjusted OIBDA*
declined year-over-year and sequentially as a result of lower
revenues, partially offset by cost reductions.

Forecast

Sprint Nextel reconfirms its forecast for 2011 as provided in the
Forecast section of our first quarter 2011 earnings release dated April
28, 2011. The company expects net postpaid subscriber additions for the
full year 2011 and to improve total net wireless subscriber additions in
2011, as compared to 2010. The company expects full year capital
expenditures in 2011, excluding capitalized interest, to be
approximately $3 billion. In addition, the company expects to generate
positive Free Cash Flow* for 2011 and for the second through the fourth
quarter of 2011.

*FINANCIAL MEASURES

Sprint Nextel provides financial measures determined in accordance with
accounting principles generally accepted in the United States (GAAP) and
adjusted GAAP (non-GAAP). The non-GAAP financial measures reflect
industry conventions, or standard measures of liquidity, profitability
or performance commonly used by the investment community for
comparability purposes. These measurements should be considered in
addition to, but not as a substitute for, financial information prepared
in accordance with GAAP. We have defined below each of the non-GAAP
measures we use, but these measures may not be synonymous to similar
measurement terms used by other companies.

Sprint Nextel provides reconciliations of these non-GAAP measures in its
financial reporting. Because Sprint Nextel does not predict special
items that might occur in the future, and our forecasts are developed at
a level of detail different than that used to prepare GAAP-based
financial measures, Sprint Nextel does not provide reconciliations to
GAAP of its forward-looking financial measures.

The measures used in this release include the following:

OIBDA is operating income/(loss) before depreciation and
amortization. Adjusted OIBDA is OIBDA excluding severance,
exit costs, and other special items. Adjusted OIBDA Margin
represents Adjusted OIBDA divided by non-equipment net operating
revenues for Wireless and Adjusted OIBDA divided by net operating
revenues for Wireline. We believe that Adjusted OIBDA and Adjusted OIBDA
Margin provide useful information to investors because they are an
indicator of the strength and performance of our ongoing business
operations, including our ability to fund discretionary spending such as
capital expenditures, spectrum acquisitions and other investments and
our ability to incur and service debt. While depreciation and
amortization are considered operating costs under GAAP, these expenses
primarily represent non-cash current period costs associated with the
use of long-lived tangible and definite-lived intangible assets.
Adjusted OIBDA and Adjusted OIBDA Margin are calculations commonly used
as a basis for investors, analysts and credit rating agencies to
evaluate and compare the periodic and future operating performance and
value of companies within the telecommunications industry.

Free Cash Flow is the cash provided by operating activities less
the cash used in investing activities other than short-term investments
and equity method investments during the period. We believe that Free
Cash Flow provides useful information to investors, analysts and our
management about the cash generated by our core operations after
interest and dividends and our ability to fund scheduled debt maturities
and other financing activities, including discretionary refinancing and
retirement of debt and purchase or sale of investments.

Net Debt is consolidated debt, including current maturities, less
cash and cash equivalents, short-term investments and if any, restricted
cash. We believe that Net Debt provides useful information to investors,
analysts and credit rating agencies about the capacity of the company to
reduce the debt load and improve its capital structure.

SAFE HARBOR

This news release includes “forward-looking statements” within the
meaning of the securities laws. The statements in this news release
regarding the business outlook, expected performance and forward-looking
guidance, as well as other statements that are not historical facts, are
forward-looking statements. The words "estimate," "project," "forecast,"
"intend," "expect," "believe," "target," "providing guidance" and
similar expressions are intended to identify forward-looking statements.

Forward-looking statements are estimates and projections reflecting
management's judgment based on currently available information and
involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the forward-looking
statements. With respect to these forward-looking statements, management
has made assumptions regarding, among other things, customer and network
usage, customer growth and retention, pricing, operating costs, the
timing of various events and the economic and regulatory environment.

Future performance cannot be assured. Actual results may differ
materially from those in the forward-looking statements. Some factors
that could cause actual results to differ include:

our ability to attract and retain subscribers;

the ability of our competitors to offer products and services at lower
prices due to lower cost structures;

the effects of vigorous competition on a highly penetrated market,
including the impact of competition on the price we are able to charge
subscribers for services and equipment we provide and our ability to
attract new subscribers and retain existing subscribers; the overall
demand for our service offerings, including the impact of decisions of
new or existing subscribers between our postpaid and prepaid services
offerings and between our two network platforms; and the impact of
new, emerging and competing technologies on our business;

the effective implementation of Network Vision, including timing,
technologies, and costs;

consummation of the LightSquared transaction and the associated
financial benefits;

changes in available technology and the effects of such changes,
including product substitutions and deployment costs;

our ability to obtain additional financing on terms acceptable to us,
or at all;

volatility in the trading price of our common stock, current economic
conditions and our ability to access capital;

the impact of unrelated parties not meeting our business requirements,
including a significant adverse change in the ability or willingness
of such parties to provide devices or infrastructure equipment for our
CDMA network, or Motorola Mobility, Inc.'s or Motorola Solutions
Inc.'s ability or willingness to provide related devices,
infrastructure equipment and software applications for our iDEN
network;

the costs and business risks associated with providing new services
and entering new geographic markets;

the financial performance of Clearwire and its ability to develop,
deploy and maintain its 4G network;

the effects of mergers and consolidations and new entrants in the
communications industry and unexpected announcements or developments
from others in the communications industry;

unexpected results of litigation filed against us or our suppliers or
vendors;

the impact of adverse network performance;

the costs or potential customer impacts of compliance with regulatory
mandates including, but not limited to, compliance with the FCC's
Report and Order to reconfigure the 800 MHz band;

one or more of the markets in which we compete being impacted by
changes in political, economic or other factors such as monetary
policy, legal and regulatory changes or other external factors over
which we have no control; and

other risks referenced from time to time in our filings with the
Securities and Exchange Commission, including in Part I, Item IA “Risk
Factors” of our annual report on Form 10-K for the year ended December
31, 2010 and, when filed, Part II, Item 1A “Risk Factors” of our
quarterly report on Form 10-Q for the quarter ended June 30, 2011.

Sprint Nextel believes these forward-looking statements are reasonable;
however, you should not place undue reliance on forward-looking
statements, which are based on current expectations and speak only as of
the date of this release. Sprint Nextel is not obligated to publicly
release any revisions to forward-looking statements to reflect events
after the date of this release. The reader should not place undue
reliance on forward-looking statements, which speak only as of the date
of this release.

Clearwire’s second quarter 2011 results from operations have not yet
been finalized. As a result, the amount reflected for Sprint’s share of
Clearwire’s results of operations for the quarter ended June 30, 2011,
is an estimate and, based upon the finalization of Clearwire’s results,
may need to be revised if our estimate materially differs from
Clearwire’s actual results. Changes in our estimate, if any, would
affect the carrying value of our investment in Clearwire, net loss and
basic and diluted loss per common share but would have no effect on
Sprint’s operating income, OIBDA*, Adjusted OIBDA* or consolidated
statement of cash flows.

About Sprint Nextel

Sprint Nextel offers a comprehensive range of wireless and wireline
communications services bringing the freedom of mobility to consumers,
businesses and government users. Sprint Nextel served more than 52
million customers at the end of the second quarter 2011 and is widely
recognized for developing, engineering and deploying innovative
technologies, including the first wireless 4G service from a national
carrier in the United States; offering industry-leading mobile data
services, leading prepaid brands including Virgin Mobile USA, Boost
Mobile, and Assurance Wireless; instant national and international
push-to-talk capabilities; and a global Tier 1 Internet backbone.
Newsweek ranked Sprint No. 6 in its 2010 Green Rankings, listing it as
one of the nation’s greenest companies, the highest of any
telecommunications company. You can learn more and visit Sprint at www.sprint.com
or www.facebook.com/sprint
and www.twitter.com/sprint.

Capital expenditures is an accrual based amount that includes the
changes in unpaid capital expenditures and excludes capitalized
interest. Cash paid for capital expenditures, which includes $99
million and $102 million of total capitalized interest in the first
and second quarters 2011, respectively, can be found in the
condensed consolidated cash flow information on Table No. 8 and the
reconciliation to Free Cash Flow* on Table No. 9.

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